VISTA Trusts

Have you ever heard the term VISTA trust? It is something special that belongs to the British Virgin Islands and the origin of this word is quite simple. Less than three years ago the British Virgin Islands adopted the Virgin Islands Special Trusts Act, 2003. Abreviation of this Act is V.I.S.T.A.

What is the VISTA trust and why it is Special Trust Act? As it is stated on the BVI FSC website, this is an act used to make special provision for trusts of shares in companies and to make related matters that include provision for the retention by trustees of shares in a company irrespective of the financial advantages of disposal. The act is also needed for prohibiting trustees from intervening in the company management (except some particular circumstances) as well as for the appointment and removal of the company directors according to the terms of the trust instrument.

This legislation is aimed at enabling trustees to retain shares in BVI international business companies (IBCs) and local companies, irrespective of the financial benefits of holding them. The legislation allows the complete removal of the trustee’s monitoring and intervention obligations (if the settlor does not require otherwise), allows the settlor to delegate the trustee to intervene in order to resolve specific problems and lets trust instruments lay down rules for the directors appointment and removal.

Previously, trusts have been considered to be not an appropriate vehicle for holding company shares as English trust used to help to preserve the value of trust investments. That's why the trust did not seem attractive to hold assets which settlors intend trustees to retain.

The Virgin Islands Special Trusts Act 2003 limits the liability of the trustee and withdraws the trustees duties to monitor and to intervene. This is the feature that makes this trust special.
To some extent, the Virgin Islands Special Trusts Act 2003 may be a reaction to the adoption of the International Business Companies (Amendment) Act as this act immobilised bearer shares and made important amendments to the BVI corporate legislation.

As it can be traced from the title of the Act, the trusts created under the Virgin Islands Special Trusts Act 2003 will enable a shareholder to establish a trust of his company that disengages the trustee from management responsibility and permits the company and its business to be held as long as the directors think fit.

In short words, this is the answer to the questions - why the trusts made under the Virgin Islands Special Trusts Act 2003 are special trusts and what VISTA trust is. This blog is dedicated to my friend who asked whether VISTA trust is somehow related to Alta Vista :)